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1. 

   bigTom Posted 6:09 am
   13 Mar 2008

   Isn't this the perfect is the enemy of the good!

     Clearly if we go for an aggressive carbon reduction policy, we could end up fighting about it for years. I.E. we could miss the climate change window before taking action. I would prefer a tax, which gradually increases with time, say $0/ton this year, $4/ton next year,... The "tax or safety value cap" should never be significantly higher than the cost of free air capture of CO2. I am a fan of gradual (but predicatble) change of prices, this allows for business planning. It also avoids some of the perverse incentive to do something just before the tax kicks in. From the standpoint of business, a known future cost is preferable to an larger but uncertain potential future cost, which is where industrial planning is today -expecting some sort of extra carbon charge, but not knowing when it will begin or how large it will be. If the slope of the safety valve is reasonably steep capital expenditure decisions will factor in the price several years down the road into their planning, and it should be enough to start moving us in the direction we need to go.  

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2. 

   BILL HANNAHAN Posted 7:27 am
   13 Mar 2008

   What should our goal be?

   Question. Should our goal should be to;

   A     Limit CO2 emissions to X tons / year with no safety valve.
   or
   B     Maximize quality of life for people.

   If you choose A, cap n trade with no safety valve is the way to go.

   If you choose B, we should charge a dumping fee for all pollutants released into the atmosphere, that is set equal to our best estimate of the damage they do. The numbers would be updated as the science shrinks the uncertainty.

   Cap n trade with no safety valve is not likely to accomplish B because we do not know what limit will achieve that goal and because the system will be gamed by manipulators decreasing the effectiveness of the system.

   We may find ourselves spending $1,000 dollars to prevent $20 worth of damage, resulting in very expensive energy which is inherently dangerous and uncomfortable.

   Cap n trade with a safety valve is a compromise, but it must be applied worldwide to be effective or it will just shift emissions and jobs elsewhere.

   Each one cent increase in the cost of a kWh of electricity costs every man woman and child in the U.S. $132 per year. With 300 million Americans it is a $40 billion / cent cost increase. That is why mandating the use of impractical expensive energy systems like wind biofuel and existing solar technology is impractical.

   In reality reducing U.S. emissions now is of minor importance. If we eliminated all of our greenhouse emissions tomorrow, the developing world will gobble up the savings in a relatively short period of time.

   The most important goal for the U.S. should be to accelerate the use of our technical capacity to develop technology that is so inexpensive it can be implemented quickly all over the world. People will make the switch quickly and voluntarily, not kicking and screaming.

   Expensive boutique energy systems will not curtail world CO2 emissions. We need huge sources of cheap non-carbon energy.

   This is why the U.S. should increase R&D spending for non fossil energy sources from $3.00 per person per year to $300.00 per person, $90 billion / year, equivalent to an extra 2.25 cents / kWh.

   We should be pushing every technology as hard as possible and building demo plants of each as it becomes possible, in order to accelerate the development of cheap clean abundant energy.

   A gold plated wind, solar or bio fuel plan that is barely affordable in the U.S. will not solve the worlds energy problems.

   Spend $300 /person / year on R&D for a decade or so and save thousands per year for centuries.

   Accelerating the development of cheap energy systems is the greatest and cheapest gift we can provide to future generations.
   

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3. 

   trock Posted 8:53 am
   13 Mar 2008

   cap and trade problems

   bigTom,
   I'm in agreement on what your criticisms of cap and trade.   How does a company invest in a 30 year project when the price of energy could go up or down.   The only thing that would be invested in would be something of a very short duration.

   Having a tax of say 50 dollars a ton would mean that a company could plan on the 50 dollar a ton charge would not go under 50 dollars a ton.  Or that if they waited a few years that they couldn't get a better deal.  Cap and Trade might put off so many of what could be good investments because of variability.  
   

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